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U.S. regulators seem to have struck a rich field on which to focus their enforcement efforts.

Just a week after the Securities and Exchange Commission charged a Chinese company with fraudulently recording sales, the Public Company Accounting Oversight Board banned an accountant who once worked for Chinese companies. Both cases involved Chinese reverse mergers. In these transactions, a Chinese company usually buys a largely defunct U.S. company that has retained its corporate status. As a result, the Chinese outfit gets an equity listing without providing all the disclosure needed in a traditional initial public offering.

Crackdown: The PCAOB, an accounting regulator, launched its fourth China-related enforcement action of the year.
William Waitzman for Barron's

The PCAOB brought its enforcement action against Michael T. Studer, president of the Studer Group, an accounting firm with offices in Freeport, N.Y., and Vancouver, British Columbia. The accounting group has banned Studer from preparing an audit report for a securities issuer for three years. Barron's mentioned Studer in a story, "Who's Minding the Minders of Chinese Accounting?" (Feb. 18, 2008) that also cited the target of the SEC action. Studer audited companies such as
China Clean Energyccgy -10.81179468511103%China Clean Energy Inc.U.S.: OTCUSD0.049
-0.00594-10.81179468511103%
/Date(1427835070285-0500)/
Volume (Delayed 15m)
:
3000
P/E Ratio
N/AMarket Cap
1099768.72099872
Dividend Yield
N/ARev. per Employee
N/AMore quote details and news »ccgyinYour ValueYour ChangeShort position
(CCGY) and
China Kangtai Cactus Bio-tech
(CKGT), we noted in our story, despite previous PCAOB issues and securities regulatory actions against him.

The PCAOB's new moves against Studer, its fourth China-related action this year, say Studer failed to comply with its auditing standards for China Clean, China Kangtai, and another company that isn't Chinese. Studer didn't respond to requests for comment. Attempts to reach China Clean and China Kangtai were unsuccessful.

-- Leslie P. Norton

Last Week: Review

From Here to Eternity

The Federal Reserve said it was initiating an open-ended plan to turbocharge the recovery and stimulate the labor market by purchasing mortgage-backed securities totaling $40 billion a month. It is the first time the central bank has tied policy to a specific economic development—a lowering of the stubbornly high jobless rate. The new round of quantitative easing, whose duration Fed Chairman Ben Bernanke left undefined and without a specific target in job growth, was coupled with the Fed extending until mid-2015 the time it expects to leave overnight interest rates at near-zero. It said it would pursue an accommodative policy "for a considerable" time, even after the economy strengthened.

Middle East Erupts

Violent demonstrations and attacks on U.S. embassies broke out around the Arab world to protest an American-made video ridiculing the Prophet Muhammad. The U.S. sent warships toward Libya following an attack on a mission in Benghazi, where U.S. ambassador Christopher Stevens and three other Americans were killed. The conflagrations began on the anniversary of the September 11 terrorist attacks. They came amid renewed strains in relations between the U.S. and Israel, after Israeli Prime Minister Benjamin Netanyahu criticized the Obama administration and other Western allies for failing to set clear limits on Iran's pursuit of a nuclear weapon. The White House said President Obama wouldn't be meeting with Netanyahu at the U.N. later this month.

Debt Dilemma

Moody's Investors Service warned that it could downgrade the U.S. government's credit rating in 2013 if large-scale measures aren't taken to reduce the nation's rising debt. Germany's finance minister said worries about the debt were a burden on the global economy, while leaders of China and Russia sounded the alarm over the global recovery.

Eurosupport

Germany's highest court rejected attempts to delay the country's ratification of two key elements in the euro zone's plan to manage its debt crisis, but put strict conditions on the efforts. In addition, two centrist, pro-European parties won general polls in the Netherlands.